The Ministry of Finance attributed the GDP result in the third quarter to the slowdown in consumption as a result of the restrictive monetary policy pursued by the Central Bank. The interest rate is at its highest level since 2006, at 15% annually.
In the comparison between 2024 and 2025, household consumption rose from an increase of 1.8% to an increase of 0.4% from the second quarter to the third quarter, the Economic Policy Secretariat highlighted. This movement had an impact on the GDP result, whose 0.1% rise was slightly lower than the Treasury’s forecast of 0.3%.
“Household consumption slowed, reflecting lower consumption of durable and non-durable goods and a lower pace of consumption of semi-durable products and services, mainly imported. The slowdown is linked to the slowdown in labor and credit markets in the third quarter, in response to the lagged effects of restrictive monetary policy.”
The rise in interest rates has generated unease among Central Bank President Gabriel Galipolo and members of Lula’s government.
“You (President Lula), like me and many Brazilians, are dissatisfied with the interest rate, the Selec rate, which is really too high and we have to work to lower it,” said the Minister of Economic Reforms, Marcos Pinto, on Thursday (4).
Revisions to the GDP series have also led to differences in growth forecasts. In the year-over-year comparison, IBGE revised the increase from 2.9% to 3.1% in the first quarter and from 2.2% to 2.4% in the second quarter. Therefore, according to the Treasury, the slope of the 2025 GDP revision is upward.
“In the third quarter, the growth rate was lower than expected by SPE at the margin, although the expansion was very close to what was expected in the inter-year comparison. This discrepancy has to do with the revisions in the quarterly series since 2024,” the secretariat said.
According to the authority, the revisions indicate that economic activity in less cyclical sectors also performed better in the first half of this year. However, the ministry notes that there is still a possibility of a slowdown.
“The trend towards a slowdown in activity, with the upward revision of GDP in the first half of the year, has become more pronounced, which has also reduced the carryover to 2026. In this way, the perspective of economic slowdown and gap closing drawn from the second half of 2025 onwards does not change.”
The result released today by IBGE indicates relative stability in the economy, after a 0.3% increase in the second quarter and a 1.5% increase in the first quarter. GDP opened 2025 with a boost from a record grain harvest, but is starting to show signs of slowing after the rural push and with interest rates remaining high to contain inflation.
The 0.1% rate was also slightly below the financial market’s average expectation, which was 0.2%, according to Bloomberg.